Investment in worker co-ops
Mark Simmonds (Co-op Culture)
Public
Seen by 90
I was interviewed yesterday by some US researchers looking at the role of innovative co-operative models in social change. They wanted to know how the model being used by some, of investors taking an equity share in worker co-ops in return for some dilution of the autonomy of the co-op might work in the UK. For example a veto on significant strategic change.
My response was that we wouldn't like this and would likely challenge whether such organisations were still co-operatives.
So my questions are:
1) Was I right? and
2) How might we bring in investors to UK worker co-operatives in a way that it would be right?
I'm aware and supportive of the use of loanstock by Unicorn. Might we see, for example, a co-operative pub where the pub was saved by a worker co-operative that would run it but financed by the local community using loanstock or another mechanism?
Are there any worker co-ops actively looking at this? I suspect that some in the tech sector might be?
John Merritt Fri 27 Apr 2018 9:37AM
The Labour Society model in Spain also has some value, I think. It is a worker buyout and worker owned and democratic, but not a Coop (over 50% must be owned by workers). The finance comes from the workers when the capitalists (shareholders) want to close the business. The workers are able to get an advance on benefit entitlements if they use it to buy shares in the business. Credit Unions could also play a role and worker coop credit unions have been on the agenda for a while. A Cooperative Banking and Finance Bill, a Solidarity Economy Development Bill, and regulatory changes re tax and tax relief for the sector which drew on international and our own knowledge and experience could really help shift control from capital (and capitalist) to labour (worker)
A Waterhouse Fri 27 Apr 2018 11:26AM
It would be a help to clarify what options of difintions are allowed to be recognised as w coops by SF.
It seems that there is a strong current that holds that only participatory flat collectives with no outside interests can be defined as w coops. These are adequate for some solutions as enterprises but may be inadequate for others.
It seems that an attitude prevails that investors should be completly subordinated. Investments in coops are often treated as a form of “selling of indulgences” , so that the others can live the pure life.
But investors, are likly to be part of a supporting communiy for w coops. The usual concern is the relationship within w coops but as important is how they relate to their communiy. So perhaps Capital in such relationships should work for workers and their community.
Might it not be acceptable to allow a limited multistaholding in w coops, with voting rights no more than 25% for none workers. This probably only applied at an AGM so having a light impact on self governance. This might allow a new generation of w coops to emerge, this needs pioneering and testing.
Investments in coops are usually based on the principle of interest/ dividend sufficient to hold these, so modest returns. A principle of a “symmetry of benefits” can be defined democratically through an associative means. Social councils to which coops can affiliate might be needed.
Pat Conaty Fri 27 Apr 2018 12:04PM
We have just completed a third report for Co-ops UK and the Co-op College on how to tackle precarious work circumstances through a strategy to develop different forms of workplace democracy including worker co-ops, social co-ops and freelance co-ops. Here is my blog at the link further below and to the Working Together report launched last month. John's pointing to the Worker Buy-Out succession fund in Spain is great and these also exist in Italy and France as our report shows. See sections 5 and 6 for more info. Public policy shifts secured in Italy, France and Spain has succeeded in advancing the Solidarity Economy. We should use that term here more often as they are using it now in Germany to create more workplace democracy innovation and to rally community and also trade union support for the innovations. Social co-ops come in two forms in southern European countries, Japan and in Quebec. Many are worker co-ops working in social care, community health, creating employment for ex-offenders, etc but others are interesting community co-ops developing solidarity economy solutions and jobs in renewable energy, local food system, etc. The latter type are multi-stakeholder social co-ops and because they are local attract community membership and investment.
Andrew Woodcock · Thu 26 Apr 2018 8:01PM
Which is why the Somerset rules limit
voting rights of investor members to 25%
The current guidance FG15/12 in 6.32 still prevents the investors
from voting on a motion to convert into a company.